Voss v. Knotts et al.

In a concise, unpublished decision, the U.S. Court of Appeals for the Ninth Circuit affirmed a district court’s grant of summary judgment in favor of the defendants in a copyright suit on the grounds that the plaintiff lacked standing.  Voss v. Knotts et al., Case No. 12-56168 (9th Cir., Apr. 8, 2014) (per curiam).

The U.S. Constitution enjoins each state to accord “full faith and credit” to “the public acts, records, and judicial proceedings of every other State”. U.S. Const. Art. IV, § 1. However, a judgment creditor can’t directly enforce a judgment obtained in another state in California. The other state’s judgment must first be turned into a California judgment. The statutory mechanism for effecting this is the Sister State and Foreign Money—Judgments Act, aka the SSFMJA, Code Civ. Proc. § 1710.10 et seq.

The Supreme Court of the United States denied a petition for writ of certiorari of the debtor, Castleton Plaza, LP, in Castleton Plaza, LP v. EL-SNPR Notes Holdings, LLC, Case No. 12-1422, meaning the prior opinion from the Seventh Circuit Court of Appeals in In the Matter of Castleton Plaza, LP, 707 F.3d 821 (7th Cir. 2013), remains intact, protecting creditors who are faced with being shortchanged by a reorganization plan proposed by a debtor that attempts to transfer the future ownership of the debtor to an insider without first putting the ownership stake up for auction.

On June 20, 2013, a three-member panel of the United States Court of Appeals for the Second Circuit issued an important decision that significantly curtails the authority of Irving Picard, as Trustee for the liquidation of Bernard L.

The Colorado LLC Act prohibits an insolvent LLC from making a distribution to a member. Insolvency is defined as the LLC’s liabilities exceeding its assets, with minor exceptions. Colo. Rev. Stat. § 7-80-606. The Act also mandates that a member who receives a distribution and who knows at the time that the LLC is insolvent is personally liable to the LLC for the amount of the distribution. Id.

The US District Court for the Southern District of New York affirmed an order rejecting an objection to the confirmation of a Chapter 11 Plan of Reorganization for Dynegy, Inc. and Dynegy Holdings, LLC (together, Dynegy) for a lack of standing.

544(b) of the Bankruptcy Code empowers a bankruptcy trustee to avoid any transfer of an interest of the debtor in property that is voidable under "applicable law" by an unsecured creditor. Under the plain language of section 544(b), before a trustee can maintain an avoidance action, the trustee must demonstrate the existence of a qualified creditor, i.e., one who: (i) has a right to avoid the transfers; and (ii) holds an "allowable" unsecured claim. Importantly, the scope of "applicable law" is undefined.

The United States Court of Appeals for the Sixth Circuit recently issued two opinions examining standing issues in bankruptcy proceedings. This article examines how those cases clarify bankruptcy practice and procedures in the Sixth Circuit related to: (1) obtaining standing to pursue causes of action on behalf of the bankruptcy estate, and (2) the standing of potential defendants to oppose orders granting authority to pursue causes of action against them.

A New York bankruptcy court recently held that a losing acquiror in a competing Chapter 11 plan fight had “standing” to seek reimbursement of its legal fees and expenses as a “substantial contribution” to the reorganization case. In re S & Y Enterprises, LLC, et al., 2012 Bankr. LEXIS 4622, at *4-*5 (Bankr. E.D.N.Y., September 28, 2012). Nevertheless, the losing acquiror failed to recover because, in the court’s view, it did not satisfy the statutory requirements for reimbursement with the requisite “preponderance of the evidence.” Id.

In this memorandum opinion, the Court of Chancery held that plaintiff note holders waived their statutory right to seek appointment of a receiver for a debtor corporation where the notes they purchased were subject to clear language in a “No-Action Clause” of the governing indenture, which prohibited such action unless certain requirements were met.